SUMMARY OF CASE LAW
Once the taxable service is exported and various input services have been utilized for providing the output service the service provider is entitled for the rebate, which is equal to the service tax paid on the input services.
11. We have gone through the records of the case carefully. In respect of Appeal No. ST/115/2008, the rebate has been rejected on the ground that the service exported Is not taxable. However, in the other appeal it has been, held that they are taxable. Only with regard to some of the input services, the Commissioner (Appeals) in his order had expressed certain doubts as to their entitlement for credit and remanded the matter to the Original Authority. Both the orders are under challenge. In terms of the agreement entered by the appellant, the following services are provided to the recipients situated abroad: a) Call centre services including technical support, customer care contact services and sales facilitation services b) Back office accounting and transaction processing c) And IT support services of remote maintenance, trouble shooting, catering to Dell’s group companies outside India and their overseas customers. 11,1. According to the appellants, the above services would qualify to be Business Auxiliary Services. In any case, in the light of the’ Board’s clarification dated 21.08,2003. the above services cannot be categorized under “Information Technology Service” and excluded from the scope of “Business Auxiliary Service.” The extract of the Board’s Circular is reproduced here: “2. Scope of IT service under Business Auxiliary Service: 2.3. It is clarified that there is no contradiction between the clarifications dated 28.02.2003 and dated 20.06.2003. The scope of IT services is explained in the definition of Business Auxiliary Service in the Act itself as any service in relation to designing, developing or maintaining of computer software or computerized data processing or system networking or any other service primarily in relation to operation of computer systems. The last words “primarily in relation to operation of computer systems” make the intention abundantly clear The words “back office processing” used In the clarification dated 28.02.2003 have to be read in conjunction with the other terms used therein viz. data processing, networking, computer facility management Thus, any sen/ice of back office processing primarily in relation to operation of computer system will be covered as IT services and not taxable. Payroll processing, accounts management etc. even by using computer programs, cannot be termed as activities primarily in relation to computer systems. The use of computer in these services is secondary and the primary activity is that of business-related wock. Thus, these services will be taxable as Business Auxiliary Ser/ices. This is exactly the position that has been clarified in the circular dated 20.05.2003.”
12. In any case, the Commissioner (Appeals) in the orders 83 & 83A/2008 ST had already stated that the service rendered by the appellant and exported are taxable services, it is also not in dispute that the appellants utilized the various inputs services, which had already been enumerated in the submission of the appellants. Once the taxable service is exported and various input services have been utilized for providing the output service :”i.e. appellants could be entitled for the rebate, which is equal to the service tax paid on the input services. Going by the definition of the “input service” under Rule 2(1) of the Cenvat Credit Rules, 2004 the service utilized by the appellants for providing output service can indeed be considered as input services. We also take note that the definition of “input service” indicates that the interpretation should be done in a liberal way in view of the phrase “activities relating to business”, there cannot be any dispute that the input services rendered by the appellants are all activities relating to the output services exported by the appellant. Moreover, on going through the records^ we are satisfied that the appellants had fulfilled the five conditions of Notification No. 12/2005 already enumerated in the submission of the appellants these circumstances, the impugned orders do not have any merit. The appellants are entitled for the rebate in respect of all the rebate claims filed by them during the relevant period. In view of the above findings we allow the appeals with consequential relief.